Refund of unutilised input tax credit

[Yatin Bhopi]

Dear expert

We are procuring goods locally on the payment of SGST+CGST and supplying goods to SEZ without payment of taxes under LUT. Now we are not able to utilise ITC paid on purchses since there is no other taxable supply.

Please let me know whether is there any provision of claiming refund claim of unutilised ITC.

AI Summary

Zero rated supply to SEZ: claim refund of unutilised input tax credit or pay IGST and claim refund of IGST.
Supply to a Special Economic Zone is a zero rated supply, permitting (a) export under bond or a Letter of Undertaking without payment of integrated tax and refund of unutilised input tax credit, or (b) payment of IGST on supplies and refund of the IGST paid under the statutory refund provisions. Practitioners note refund of paid IGST is often administratively simpler, and that CGST and SGST credits can be used to discharge IGST liabilities (utilising CGST then SGST), while cross-utilisation between CGST and SGST is not allowed.